Study: Land Use Regulation Restricts Housing Supply

"Yet another study in a long line of others provides evidence that land-use regulations restrict housing supply," according to Emily Hamilton. Specifically, a new paper authored by Kip Jackson at the Office of the Comptroller of the Currency "identifies a correlation between land-use regulations in California cities and the growth rate for housing units."

Jackson's research, published in the Journal of Urban Economics, "finds that California zoning rules and other land-use restrictions not only reduce the growth rate of new housing stock, but a new regulation can actually be expected to reduce the existing stock of housing by 0.2% per year."

The article also explains how the paper's methodology produced findings that other studies haven't found. "Aggregate indexes of regulation across cities, such as the Wharton Residential Land Use Regulatory Index, can’t measure the changing effect that a rule has over time," for instance.

For more explanation of the new research, Kip Jackson writes his own blog post for the US Centre at the London School of Economics.